EU plans to share excess profits with fossil fuel companies, draft law says

The gas compressor station, part of the Polish section of the Yamal gas pipeline that connects Russia to Western Europe, which is owned by a joint venture of Gazprom and PGNiG, but is operated by the Polish gas transmission company Gaz -System, is seen in Gabinek near Wloclawek, Poland May 23, 2022. REUTERS/Kacper Pempel

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BRUSSELS, Sept 12 (Reuters) – The European Commission wants to require fossil fuel companies benefiting from soaring energy prices to make a financial contribution to help citizens and industries struggling with soaring fuel costs energy, according to a draft document seen by Reuters.

The draft proposal, details of which are expected to be unveiled by Brussels this week, would see European Union countries introduce a “solidarity contribution” for the fossil fuel industry.

Oil, gas, coal and refining companies are expected to make a financial contribution based on “taxable excess profits earned in fiscal year 2022,” according to the draft, which could change before it is released.

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The temporary scheme would raise money for governments to fund measures that can help alleviate Europe’s energy crisis, including supporting households and businesses facing high energy bills, helping energy-intensive industries , reducing EU energy consumption and making Europe more self-sufficient in its energy supply.

“Solidarity contributions are justified by the fact that these companies achieve unpredictable excess profits, which are due to unforeseen circumstances,” says the draft proposal.

“These profits do not correspond to any regular profit that these entities would have or could have expected to obtain under normal circumstances if the unforeseeable events in the energy markets (…) had not taken place”, he added. he declares.

The emergency energy situation, which was triggered by Russia’s invasion of Ukraine on 24 February, means the measure would be adopted by a strengthened majority of member states – meaning it would not require the unanimous approval of the 27 member countries.

The Commission will also propose a measure to recover revenues from non-gas-fired power stations and use the cash to support energy consumers facing rising bills, alongside a reduction in electricity demand from the EU. EU, says the project.

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Reporting by Yun Chee Foo, Kate Abnett; Editing by Paul Simao

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